Unfortunately, many people currently trying to serve college students as teachers, administrative employees or other higher education workers may be in for a rude awakening. Imagine the professor with tenure that believes he or she has a job for life, or the hard working college cafeteria cook who believes there’s no way they’ll lose their job.
Think about what it would be like for those individuals to be suddenly looking to make a career change late in life, when it is so difficult to do so.
Unfortunately, many employees in jobs such as those, or any related to higher education, could be on the unemployment line soon and pondering career changes. It’s a situation that far too many Americans have faced in recent years, often due to the impacts of different types of “bubbles,” in the American economy.
The housing bubble was a major underlying cause of the economic turbulence of the last decade, and unfortunately most were blindsided by it. People were also caught off guard by the disastrous impact of the complacency of American car manufacturers.
After a few years of a decline in the sales of American automobiles, largely due to the better value and prices of foreign carmakers, General Motors, Ford and Chrysler fell on tough times that led to bankruptcy. Their inability to obtain credit had a lot to do with the nationwide financial crisis, but their need for credit came directly from their complacency.
Tuition is Increasing, but Value is Not
Unfortunately, college educations are offering less and less value. This is due in part to incompetence and complacency among universities, which have kept tuition rates inflated despite offering little extra value and no guarantee of good, high-paying jobs after graduation.
There are many stories of recent college graduates living at home with their parents for a couple of years while they continue to search for jobs. Others have had to accept jobs that don’t even require a college degree and pay minimal amounts of money. These graduates are often struggling to repay student loans, which is a bad omen for the education economy.
If students default at too high of a rate on their student loans, the entire student loan industry may collapse. This would be very similar to the subprime mortgage crisis of the financial industry. Simply put, if the availability of student loans diminishes, then the number of students who can afford a college education will decrease significantly.
That impact will be felt far and wide in the education industry, as universities will have to react in one of a limited number of ways.
How Can Universities Face That Challenge?
There would be a few basic options for colleges if the demand from students for higher education decreased due to an inability to afford it. They could decrease their size by cutting back on staff and professors, thus setting up their structures in a way that they could afford to run everything on a smaller scale. This seems like an unlikely route to take.
The other way would be to decrease tuition by decreasing the cost of operating, which could lead to large-scale cutbacks in the number of employees they can afford. Students would be getting less quality, but paying the same tuition.
Neither of these is good for students, who need every edge that they can get from a higher education as they face extremely competitive job markets that often have far fewer jobs than job seekers.
In addition, the problem is compounded by cuts in state funding that are likely to come if they haven’t already. With governmental debt rising and voters paying more and more attention to it, state governments and the federal government are forced to make difficult decisions to either raise taxes or cut spending. Those spending cuts could hit education, as many public universities get a great deal of state funding.
What Does This Mean for University Employees?
Unfortunately, those who once thought they had jobs that could last forever may find themselves facing the grim reality of perusing the want ads and entering job market sooner rather than later. If things don’t improve in the education world quickly, an education bubble could be coming.
If you’re currently employed in higher education it may be a good idea to begin thinking about what you’d do if you lost your job and couldn’t stay in education. If you have a game plan and a secondary career option, you’ll be ahead of the curve if things go wrong.